International Air Transport Association, et al. v. Canadian Transportation Agency, et al., 2022 FCA 211 (40614)
This case involved a challenge to the validity of regulations adopted by the Canadian Transportation Agency (“Agency”) to compensate air passengers for various delays, losses and inconveniences experienced in the course of international air travel. Parliament adopted the Transportation Modernization Act which amended the Canada Transportation Act by creating the new s. 86.11. This new provision required the Agency, after consulting with the Minister of Transport, to make regulations imposing certain obligations on air carriers, notably in relation to flight delays, flight cancellations, denial of boarding, and loss of or damage to baggage. Pursuant to s. 86.11(2) of the CTA, the Minister issued the Direction Respecting Tarmac Delays of Three Hours or Less (the Direction) requiring the Agency to adopt regulations imposing obligations on air carriers to provide timely information and assistance to passengers in cases of tarmac delays of three hours or less. The Agency adopted the Air Passenger Protection Regulations (the Regulations), imposing obligations, including liability, on air carriers with respect to tarmac delays, flight cancellations, flight delays, denial of boarding and damage or loss of baggage in the context of domestic and international air travel. The Applicant airlines challenged numerous provisions of the new Regulations on the basis they exceed the Agency’s authority under the CTA. They claimed the Regulations contravene Canada’s international obligations, in particular the Convention for the Unification of Certain Rules for International Carriage by Air (“Montreal Convention”) and many of the Regulations’ provisions are ultra vires because they have impermissible extraterritorial effects, which violate fundamental notions of international law. These matters went directly to the Fed. C.A. It dismissed the appeal, except with respect to s. 23(2) of the Regulations which it found ultra vires of the CTA (this section dealt with liability for temporary loss of baggage). “The application for leave to appeal…is granted with costs in the cause.”